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Low Cost and High Return: The Value of Self-Help Groups

"No country can ever truly flourish if it stifles the potential of its women and deprives itself of the contribution of half its citizens.

~Michelle Obama

If someone were to tell you that you could achieve a 5,700% return on an investment what would you say?

Well this is what Aster, a woman living in Ethiopia who dreamed of starting her own business achieved.

Recently, we told Aster’s story and how she longed to have her own capital but was unable to secure loans. Through our Self-Help Groups, she was able to achieve her dream but her struggles as a woman desiring to start her own business are not unique.  

1 in 3 women globally run their own small or medium-size business. Women borrow and save 3-6% less than men.

Women face the same challenges as men when beginning a small business but they encounter additional obstacles like limited access to credit and savings. The gaps are vast but the disparities increase depending on location. 

In Sub-Saharan Africa, just 23% of small to mid-sized businesses are owned by women. In low-income countries, only 5% of women borrow for new businesses and 23% of women save for expansion or growth.

Access to financial accounts and services are only available to 37% women in Sub-Saharan Africa, compared to 79% in Europe/Central Asia and 93% in North America.1

In spite of these challenges, there is enormous potential for women like Aster to own and grow their business.  We want to see more women like Aster overcome the challenges and through our Self-Help Group (SHG) programme in Ethiopia, many women now operate their own small business.  There are over 12,000 SHGs which have resulted in a life-changing impact for over one million women. 

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Photo: Using shredded nylon farm-storage bags, women in a SHG weave rope to sell in the local market Credit: Sean Copeland, Tearfund Ireland

The SHGs are made up of 12-15 women and are usually chosen from the poorest sectors of the community. Many do not have capital, savings or experience in utilising their natural skills for marketability. 

Each group sets up a savings scheme and establishes by-laws. Members save a small amount each week and can take out small loans with low interest. As the capital increases, the available loans increase. Initially, members use the loans for education, healthcare and income growth. Many later use loans to start their own small businesses. 

A cost benefit analysis of the SHGs was conducted by Tearfund to assess the value for money. Costs were offset against benefits related to increased income, access to low-interest loans and reduced sale of assets during times of stress. 

The outcome of the analysis found that for every Euro spent, there is a return of between 58 and 173 Euro in benefits. The benefit-to-cost ratios (BCRs) range between 58:1 and 173:1 for individual programmes. Self-Help Groups growth becomes self-sustaining after ten years of donor funding with the returns rising to more than 210 Euros in benefits (210:1 and above).2


This a huge impact and can make a tremendous difference in the lives of many, all for €1! It's a tremendous investment and one Euro can transform many lives.


For every 58 euro-HFE-2-2

Photo Etagean Bekele, member of the Sikuwa SHG, standing in front of her crops she grows to sell at the market. Credit: Sean Copeland, Tearfund Ireland

SHGs allow members to diversify their income and pool resources to help others. They are self-sustaining, self-replicating and create long-lasting change. The groups have very high returns with low cost of investment.2   The estimated cost of starting an SHG is €450 and the estimated cost of keeping a SHG running is €400 per year.  With a 58:1 BCR, that leads to a return of €26,100 back into the community with an ROI of 5,700%! What business owner wouldn't love those type of numbers? 

Self-Help Groups are reducing the gap between Ethiopian men and women in business and the benefits to the wider community are substantial.  The operational costs are low and the return on investment is high, making the SHG approach a sound investment for lasting community-wide change. 

Will you consider a donation into our Self-Help Group programmes to invest in lasting change for women like Aster and their communities?  

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2 "Cost Benefit Analysis"

Cover Photo: Aynete from the SHG, Ficker (meaning "love"), makes injera (local bread) for her business.

Credit: Sean Copeland, Tearfund Ireland